U.S. retail sales were unexpectedly flat in July as Americans cut back on purchases of clothing and other goods, pointing to a moderation in consumer spending that could temper expectations of an acceleration in economic growth in the third quarter.
The Commerce Department said on Friday that the unchanged reading last month followed an upwardly revised 0.8 percent increase in June. Retail sales in June were previously reported to have increased 0.6 percent.
Sales rose 2.3 percent from a year ago. Excluding automobiles, gasoline, building materials and food services, retail sales were also unchanged last month after an unrevised 0.5 percent increase in June.
These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. Economists had forecast overall retail sales rising 0.4 percent and core sales climbing 0.3 percent last month.
Robust consumer spending helped to cushion the blow on the economy from an inventory correction and prolonged drag from lower oil prices, which restricted GDP growth to an average 1.0 percent annualized rate in the last three quarters.
Friday's data suggested consumer spending was cooling after the second quarter's brisk 4.2 percent rate of increase.